The U.S. Treasury Department announced it will purchase up to $6 billion in longer-dated government bonds on Thursday. This move represents the first operation of its kind under Treasury Secretary Scott Bessent's expanded buyback program, which aims to curb recent increases in borrowing costs.

The new maximum size is triple the $2 billion figure initially communicated to investors in early August. That original plan was abandoned in a surprise announcement on August 19, when the Treasury stated it would "at least double" the scale of such operations.

Twenty-to-30-year Treasury notes, targeted in Thursday's buyback, extended their decline on Wednesday following the announcement. The 30-year yield touched an intraday high of 5.38% before reaching a peak of nearly 5.40% earlier this month, marking the highest level since 2007.

Since the U.S.-Iran conflict escalated in late February, rising energy costs have pushed global bond yields upward. This has also shifted the outlook for Federal Reserve monetary policy—Chair Kevin Warsh raised the overnight rate last week for the first time since 2023 to help suppress price pressures.

Facing criticism that "this move amounts to intervention and fails to solve fundamental fiscal challenges," Bessent defended his decision to expand the buyback program. He stated on Monday that he acted after determining the market had "deviated" from equilibrium prices. He claimed that from the August 19 announcement to September 21, the 30-year yield rose only about 1 basis point.

Earlier on Wednesday, the Institute of International Finance, one of the world's largest financial industry associations, warned that "financial engineering" attempts would not help address underlying debt dynamics. In a report, the IIF said interventions such as secondary-market securities purchases "may provide temporary relief but cannot solve the structural drivers of rising debt."

Following the previous expanded buyback announcement—on September 9, when the Treasury declared a maximum size of $6 billion—bonds fell. Despite being triple the originally announced $2 billion, some market participants had anticipated an even larger figure, given the theoretically unlimited guidance of "at least double."

Ultimately, the Treasury did not use the full maximum amount, buying only about $5.2 billion in 10-to-20-year notes. Officials said this reflected a lack of competitive bids. In that operation, investors offered $10.5 billion in bonds to the Treasury.